Bull’s still in charge despite Greek’s tragedy
As the old expression goes; what goes up must come down. During the final minutes of trading, the Dow Jones Industrial Average trimmed its gains, falling 89.23 points, or 0.7%, locking in a weekly loss of 0.5%. For the day, only one of the Dow’s 30 components rose. The broad-based S&P 500 fared similarly, retreating 9.31 points, or 0.7%, for a loss of 0.2% for the week, while the tech heavy Nasdaq declined 23.35 points, or 0.8%, ending the week down 0.1%.
In an action reminiscent of 2011, worries about stalling efforts to keep Greece from defaulting sparked this pre-weekend decline. As stocks fell, the Chicago Board Options Exchange (CBOE) Volatility Index (VIX) jumped above 20 for the first time in nearly two weeks, rising more than 11%. While we don’t view this as a major cause for alarm, it is a reminder that all is not yet well with our European counterparts. After a week dominated by both hopes and fears about a nation at the center of Europe’s debt crisis, stocks finally snapped their five-week winning streak as negotiations faltered.
Equity markets have been red-hot this year, and frankly, last week’s pullback should come as little surprise. If stocks continued their ascent at the same fiery pace we’ve seen so far in 2012, the S&P would end the year up over 60%! Such remarkable gains are completely unrealistic to expect, and would be totally unsustainable. Healthy markets move up and down on a daily basis. While it is generally accepted that the stock market will grow in value over time, short-term movements can happen for a variety of reasons too numerous to list. It’s just the nature of the stock market.
It may be easier said than done, but we encourage you not to let unpredictable short-term moves in the market overly influence your investment decisions. In the long run, we believe Europe is going to muddle through this, though there are bound to be bumps along the way.
Tuesday – NFIB Small Business Optimism Index, Retail Sales, Import and Export Prices, Business Inventories
Wednesday – Empire State Manufacturing Survey, Treasury International Capital, Industrial Production, Housing Market Index, EIA Petroleum Status Report, FOMC Minutes
Thursday – Housing Starts, Jobless Claims, Producer Price Index, Ben Bernanke Speaks at 9:00 AM ET, Philadelphia Fed Survey
Friday – Consumer Price Index, Leading Indicators
Data as of 2/10/2012 1-Week Since 1/1/2012 1-Year 5-Year 10-Year
Standard & Poor's 500 -0.17% 6.76% 1.57% -1.33% 2.25%
DOW -0.47% 4.78% 4.68% 0.35% 3.14%
NASDAQ -0.06% 11.47% 4.06% 3.61% 5.97%
MSCI EAFE -1.17% 7.55% -9.60% -3.78% 3.56%
10-year Treasury Note (Yield Only) 1.95% N/A 3.71% 4.78% 4.88%
Notes: All index returns exclude reinvested dividends, and the 5-year and 10-year returns are annualized.
Sources: Yahoo! Finance, MSCI Barra. Past performance is no guarantee of future results.
Indices are unmanaged and cannot be invested into directly. N/A means not available.
Apple's stock soared to new heights on Thursday, pushing the company's market capitalization to $456 billion, a number that is greater than the values of rivals Google and Microsoft combined.
Gold fell on Friday, following losses in the euro and U.S. equities, as uncertainty over negotiations on a bailout package for Greece prompted investors to sell the metal and hoard cash.
Photography giant Kodak has said it will stop making digital cameras in the next six months, a media report said on Thursday. The 130-year-old Eastman Kodak Company, which invented the digital camera in 1975, has now said it will try to license its brand to other camera manufacturers. Kodak has filed for bankruptcy protection, having lost almost 90% of its market value in 2011.
Greek lawmakers looked set to endorse a new austerity deal on Sunday to secure a multi-billion-euro bailout and avert what Prime Minister Lucas Papademos warned would be "economic chaos."
QUOTE OF THE WEEK:
‘Having a plan for success isn’t necessarily unhealthy, but falling in love with the plan might be, don’t let your plan become bigger than you are’. Dr Wayne Dyer
Share the Wealth of Knowledge!
Please share this market update with family, friends, or colleagues. If you would like us to add them to our list, simply click on the "Forward email" link below. We love being introduced!
If you would like to opt-out of future emails, please reply to this email with UNSUBSCRIBE in the subject line.
Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.
The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the Nasdaq. The DJIA was invented by Charles Dow back in 1896.
The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indexes from Europe, Australia and Southeast Asia.
The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
Google Finance is the source for any reference to the performance of an index between two specific periods.
Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
Past performance does not guarantee future results.
You cannot invest directly in an index.
Consult your financial professional before making any investment decision.
Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.
By clicking on these links, you will leave our server as they are located on another server. We have not independently verified the information available through this link. The link is provided to you as a matter of interest. Please click on the links below to leave and proceed to the selected site.
by ken | 08:52 in |
Bull’s still in charge despite Greek’s tragedy